Deck 2: The Environment of Advertising

Question 1

When an advocacy group organizes a boycott of a company that produces unsafe products,that is an example of consumerism.

Answer 1

True

Question 2

When an ad states that chicken soup made with Swanson chicken broth "tastes as good as Grandma's," the advertiser is using puffery.

Answer 2

True

Question 3

The FTC may require corrective advertising for an ad that is deemed deceptive or unfair.

Answer 3

True

Question 4

Uniform newspaper advertising codes make it easy for advertisers to ensure that their ads meet all legal and ethical requirements.

Question 5

The firms eliminated by competition tend to be those that served the consumers most efficiently.

Question 6

One criticism of advertising is that ads are so powerful that consumers are helpless to defend themselves against the temptations and appeals of the ads.

Question 7

The uniform nature of advertising regulation in the United States ensures that advertisers easily understand what is required to comply with regulations.

Question 8

According to marketing professionals,advertising promotes a higher standard of living,subsidizes the arts,and supports freedom of the press.

Question 9

Critics argue that the proliferation of new media has worsened the problem of too much media.

Question 10

Adherence to ethical and socially responsible principles is the moral obligation of advertisers.

Question 11

Deceptive advertising occurs when a consumer is "unjustifiably injured" or there is a "violation of public policy."

Question 12

The abundance principle states that advertising has little effect on a wealthy economy.

Question 13

When Miller Brewing advertises that its Miller 64 brand of beer has fewer calories than Bud Light,Miller Brewing is using comparative advertising.

Question 14

NBC's stylized peacock logo is an example of a trademark.

Question 15

The economic effect of advertising triggers a chain reaction of hard-to-predict economic events.

Question 16

Advertising can add value to a brand by educating customers about new uses for a product.

Question 17

The Nutritional Labeling and Education Act (NLEA)sets strict legal definitions for terms such as light and low fat as used in advertising food products.

Question 18

Despite the increasing number of women in executive positions in the labor force,most modern advertisers have not changed their stereotypical depictions of women as subservient housewives and sex objects.

Question 19

The U.S.Supreme Court has ruled that "commercial speech" is not entitled to any First Amendment protections.

Question 20

While most children and parents are still joint consumers,more and more children are becoming sole decision makers about which products they want.

Question 21

Which of the following statements about deceptive advertising is true?

A) To be deceptive, advertising claims must be factually false or convey a false impression.
B) Deceptive advertising is sometimes used because it establishes long-term consumer confidence in the product being advertised.
C) To be labeled as deceptive, ads must contain some claims that have not been previously substantiated.
D) Deceptive ads serve the best interests of the advertisers.
E) Exaggerated, subjective claims that cannot be proven true or false are considered deceptive advertising.

Question 22

When the city of Pensacola,Florida,advertises itself as "the perfect place for the perfect Florida vacation," it is using

A) unfair advertising.
B) niche marketing.
C) deceptive advertising.
D) puffery.
E) exploitation.

Question 23

The Better Business Bureau advances the interests of business,so it often defends agencies against charges of deceptive advertising.

Question 24

Which of the following images best describes the chain reaction of economic events that takes place once a company begins to advertise?

A) the opening break shot in billiards
B) a beautiful woman entering a room full of men
C) a car slowing down as it goes uphill
D) a dart hitting the center of a bullseye
E) a line of carefully placed dominoes being knocked over

Question 25

Most advertisers welcome attention from consumer advocate groups because they make helpful suggestions but rarely succeed in having deceptive ads pulled.

Question 26

Externalities are best described as

A) social costs.
B) unseen opportunity costs.
C) factors used to increase advertising reach.
D) tangible factors that hinder communication.
E) added value.

Question 27

Which statement about how advertising affects competition is true?

A) Advertising by large firms tends to have a limited effect on small firms.
B) Most single advertisers are large enough to dominate the entire nation.
C) Advertising is highly regulated so that it does not impede competition.
D) Intense competition tends to increase the number of businesses in an industry.
E) Non-advertised products are unable to compete with advertised, branded products.

Question 28

Which of the following lines from an advertisement is an example of puffery?

A) This automobile won a prestigious safety award for four yeas in a row.
B) Our new improved formula eliminates trans-fats.
C) More than three billion consumers have eaten our pies.
D) We are a full-service travel agency that will help you plan and book your vacation.
E) Sleeping on our mattress is like floating on a cloud.

Question 29

Which of the following statements about how advertising affects price is most likely true?

A) Advertising has a strong effect on the price of agricultural products, such as soybeans.
B) Advertising always increases the price of a product.
C) The consumer who buys the product pays for the advertising.
D) Advertising has had a significant impact on the prices charged by utilities.
E) The amount typically spent on advertising is large compared with the total cost of the product.

Question 30

Under current law,the only product claims that are considered deceptive are those that

A) unjustifiably injure the consumer.
B) contain inadequate information.
C) violate public policy.
D) are factually false.
E) use subliminal images.

Question 31

Which of the following is a common way that advertising increases the value of a product?

A) Advertised products meet higher quality standards than non-advertised products.
B) Advertising eliminates all perceptual barriers to purchase a product or service.
C) Advertising makes the product better known and thus more desirable.
D) Advertising usually causes the prices of products to increase significantly.
E) Advertising stresses one primary use for a product.

Question 32

Which of the following would be an example of subliminal advertising?

A) choosing ethnically diverse actors for a commercial that will appear in urban areas
B) relying on gender role stereotypes in an advertisement
C) airbrushing naked figures into ice cubes in a liquor ad
D) repeating a slogan frequently to embed it in consumers' minds
E) using puffery instead of factual claims that can be substantiated

Question 33

The broadcast standards department at a network or affiliated station approves and rejects commercials.

Question 34

In some cases,the Advertising Self-Regulatory Council (ASRC)is more effective than the court system in handling advertising disputes.

Question 35

Suppose that the U.S.economy is going through a severe recession.Which of the following statements correctly describes the role of advertising expenditures in a recession?

A) There is no relationship between advertising expenditures and recessions.
B) If all businesses increased their advertising expenditures, the recession would end.
C) During a recession, advertising expenditures help businesses protect their market shares.
D) Historically, when business cycles dip, advertising expenditures increase.
E) Advertising expenditures do not affect the business cycle, according to most experts.

Question 36

The Better Business Bureau operates primarily at the national level and is funded by the dues of media groups.

Question 37

The abundance principle states that in an economy that produces more goods and services than can be consumed,advertising

A) maintains high prices across the board.
B) informs consumers of their alternatives.
C) contributes to the global waste disposal problem.
D) prevents firms from successfully competing for consumer dollars.
E) acts as a stabilizing factor during a long-term business cycle downturn.

Question 38

Lori and Juana are going to the mall.Lori wants to buy a pair of athletic shoes,and Juana wants to buy a pair of Reebok cross-trainers.Lori illustrates _____ demand while Juana illustrates _____ demand.

A) secondary; primary
B) longitudinal; secondary
C) external; internal
D) primary; selective
E) selective; primary

Question 39

Which theory states that advertising allows companies to compete more effectively for consumer dollars and keeps consumers informed of their selection alternatives if the economy produces more goods and services than can be consumed?

A) abundance principle
B) macroeconomic theory of supply and demand
C) economic principle of opportunity costs
D) utilitarian principle of advertising
E) normative theory of supply and demand

Question 40

In declining markets,what effect does advertising have on primary demand?

A) Advertising can turn the market around and make the product category popular again.
B) Advertising can slow the rate of product decline somewhat.
C) Advertising moves products quickly through the product life cycle.
D) Advertising helps people choose between brands by providing price information.
E) Advertising helps get new product categories off the ground by creating demand.

Question 41

A government agency in the United Kingdom reprimanded Safeway,a UK-based supermarket chain,because it distributed a leaflet titled "More reasons to shop at Morrisons." (Morrisons is one of Safeway's primary competitors in the UK).In the leaflet,Safeway depicted two shopping receipts,one for Safeway and one for Morrisons.The Safeway receipt claimed goods purchased at Safeway were much cheaper than the same goods purchased at Morrisons.Morrisons said that the goods on the imaginary receipt were not typical purchases and that the reason they were cheaper on the Safeway receipt was that the goods were on sale in the Safeway store.The FTC would have most likely found Safeway guilty of

A) puffery.
B) pro bono advertising.
C) deceptive advertising.
D) an ethical dilemma.
E) non-competitive advertising.

Question 42

The Federal Trade Commission (FTC)regulates the marketplace by

A) eliminating practices that are deceptive or unfair.
B) reducing the number of sellers in the marketplace.
C) enforcing state consumer protection laws.
D) expanding externalities in the marketing process.
E) limiting the information that is provided to consumers.

Question 43

Nike's Air Jordan XX3,the 23^rd edition of the series of shoes endorsed by retired basketball star Michael Jordan,differs from its predecessors because it is the first basketball shoe shaped by what Nike calls "Nike Considered," an approach to design that favors environmentally preferable materials,reduces toxic chemicals,and curbs waste.By adopting such environmentally supportive standards to make its products,Nike is

A) manipulating the consumer.
B) behaving in a socially responsible fashion.
C) perpetuating a materialistic viewpoint.
D) complying with federal regulations.
E) initiating a market development strategy.

Question 44

Which of the following is a method advertisers use to show their social responsibility?

A) refraining from the use of advertising clutter
B) providing pro bono work to nonprofit groups
C) obeying most FTC regulations
D) creating markets for new products
E) joining self-regulatory agencies

Question 45

_____ advertising occurs when a consumer is "unjustifiably injured" or there is a "violation of public policy."

A) Deceptive
B) Corrective
C) Unfair
D) Pro bono
E) Comparative

Question 46

According to the owner of NPC & Associates,Maryland's largest African American-owned ad agency,"If you were to come from another planet and watch American television,you would think that all black people did was play basketball and hang out on street corners and do rap music." The speaker is most likely accusing advertising of

A) making consumers too materialistic.
B) being excessive.
C) manipulating people into buying things they do not need.
D) being deliberately deceptive.
E) perpetuating stereotypes.

Question 47

Verizon,a provider of cell phone service,frequently runs TV ads that feature a series of maps.One map shows how much of the country is covered by Verizon's service.The other maps show how much of the country is covered by Verizon's major competitors.These commercials are an example of

A) corrective advertising.
B) unfair advertising.
C) comparative advertising.
D) testimonial advertising.
E) segmented-market advertising.

Question 48

The FTC defines _____ as any ad that contains a misrepresentation,omission,or other practice that can mislead a significant number of reasonable consumers to their detriment.

A) pro bono advertising
B) faux marketing
C) unfair advertising
D) deceptive advertising
E) subliminal advertising

Question 49

Ever since the Napoleonic Wars,the British have used the derogatory term frogs to refer to the French.When the London-based Institute Français advertised French-language courses at all levels from beginners to advanced students,it pictured the development of a frog in stages from egg through tadpole to full maturity.This would be an example of

A) deliberate deception.
B) advertising manipulation.
C) faux marketing.
D) stereotype perpetuation.
E) cultural puffery.

Question 50

According to Wilson Bryan Key,subliminal advertising

A) works by creating a need for previously unsought products.
B) involves providing an incomplete amount of information to consumers.
C) relies on embedded messages that seduce consumers into making purchases.
D) degrades people's value systems by promoting materialism and hedonism.
E) results in a normative demand cycle for most mature products and services.

Question 51

Olive oil is usually advertised using terms such as "pure olive oil" and "extra virgin," a phrase that denotes the highest grade of olive oil.However,studies have shown that olive oil is one of the most adulterated products on the market.Many of the oils sold in grocery stores are of lower quality than advertised or,even worse,are diluted with other products such as sunflower oil.Olive oil producers who claim to sell extra virgin,pure olive oil but really provide an impure product have engaged in

A) puffery.
B) pro bono advertising.
C) deceptive advertising.
D) unfair advertising.
E) subliminal advertising.

Question 52

_____ means doing what the advertiser and the advertiser's peers believe is morally right in a given situation.

A) Principled advertising
B) Situational advertising
C) Truth-in-advertising
D) Ethical advertising
E) Responsible advertising

Question 53

Which of the following statements about the social impact of advertising is true?

A) While consumers believe there is a potential for too much advertising, most advertisers disagree.
B) Most people tolerate ad clutter as the price for free TV and an information-rich Internet.
C) The FCC has imposed no restraints on advertising clutter in any media.
D) The social impact of advertising is purely a consumer misperception.
E) The social impact of advertising has been decreasing in the 21^st century.

Question 54

Socially responsible advertisers

A) are mindful of the need for open communication.
B) do what the government wants and requires.
C) do what society views as best for the welfare of people in general.
D) do what ethical societies have prescribed for businesses.
E) realize their primary responsibility is to increase profits.

Question 55

With respect to offensiveness in advertising,Abercrombie & Fitch ads have frequently been criticized for using overly sexualized imagery.Experts would most likely agree that the ultimate regulator of such ads is the fact that

A) universal laws completely control this form of advertising.
B) moral standards are higher for clothing manufacturers than other companies.
C) trends and personal tastes are objective and quantifiable metrics.
D) such companies tend to lose money and shift their marketing strategies.
E) the marketplace has the ultimate veto power on the success or failure of such ads.

Question 56

How has the U.S.Supreme Court intervened in the rights of advertisers under the First Amendment?

A) It has supported the ban against professional advertising.
B) It has established strict control over packaged-goods advertising.
C) It has banned all cigarette advertisements from broadcast media.
D) It has offered significant protection for truthful commercial speech.
E) It has made social responsibility mandatory for publicly traded firms.

Question 57

Television commercials for Progressive Insurance often list Progressive's rates next to the rates of other major insurance companies.This is an example of _____ advertising.

A) corrective
B) deceptive
C) comparative
D) consumerist
E) unfair

Question 58

Which of the following statements about consumer privacy issues is most likely true?

A) Consumers lack any capabilities or tools to limit the personal information gathered about them on the Internet.
B) According to the Fair Information Practice Principles, Internet companies must clearly post their privacy policies.
C) Disabling cookies has no impact on consumers' ability to access the Internet.
D) According to the Fair Information Practice Principles, consumers cannot access information collected about them on Internet sites.
E) When Internet users "opt in," they relinquish their ability to set terms under which they give personal information.

Question 59

To promote responsible children's advertising and to respond to public concerns,the Council of Better Business Bureaus established the

A) Children's Protection Agency (CPA).
B) Children's Advertising Review Unit (CARU).
C) Children's Board of Information.
D) Board of Advertising Review.
E) Code for Ethical Children's Advertising (CECA).

Question 60

A complaint was filed with the Federal Trade Commission (FTC)that accused the film industry of regularly advertising R-rated movies during television shows most popular with children.The FTC most likely investigated to see if the film industry was guilty of

A) corrective advertising.
B) unfair advertising.
C) deceptive advertising.
D) false demonstrations.
E) partial disclosure.

Question 61

The _____ has indirect control over advertising through its authority to license or revoke the license of all broadcasting stations.

A) Federal Trade Commission
B) Federal Communications Commission
C) Better Business Bureau
D) Advertising Self-Regulatory Council
E) Office of Consumer Affairs

Question 62

When Mei looked at her can of paint remover,she saw a notice that read,"Use in a well-ventilated place.Avoid inhaling the fumes from this product,which can damage the lungs and the nervous system." Which term best describes this label information?

A) cease-and-desist warning
B) customer testimonial
C) nutritional claim
D) consent decree
E) affirmative disclosure

Question 63

A magazine ad states,"Oral-B Professional Care 8850 rechargeable toothbrush removes up to 97% of plaque from hard-to-reach areas." Which federal agency would have the authority to determine if this claim was correct?

A) the Library of Congress
B) the Patent and Trademark Office
C) the Food and Drug Administration
D) the Office of Consumer Affairs
E) the Federal Communications Commission

Question 64

The Federal Trade Commission has filed a complaint against Provide Commerce,the parent company of Pro-Flowers,for "false and misleading" advertising.Pro-Flowers claims that it ships inventory "directly from the fields." The ads imply that the flowers are not picked until they are ordered.Pro Flowers actually stores flowers in refrigerated warehouses and ships from these warehouses.The FTC can most likely order Pro-Flowers to run _____ and inform its customers that its flowers do not come fresh from the field.

A) substantiated advertisements
B) corrective advertisements
C) cease-desist orders
D) consent orders
E) comparative advertisements

Question 65

Much of the state legislation that deals with advertising is based on the

A) U.S. Chamber of Commerce handbook.
B) self-regulation codes of advertising organizations.
C) "truth-in-advertising" model developed by Printer's Ink.
D) U.S. Supreme court's "code of commercial speech."
E) federal government's "General Code of Advertising Ethics."

Question 66

Consumer advocate groups are most likely to

A) create communication barriers that make it difficult for advertisers to reach consumers.
B) investigate advertising complaints received from the public.
C) issue trademarks and copyrights.
D) sponsor competitor boycotts.
E) substantiate ads.

Question 67

Through the issuance of _____,the government provides incentives to invent,invest in,and disclose new technology.

A) trademarks
B) copyrights
C) patents
D) venture capital
E) differential advantages

Question 68

When the Federal Trade Commission determines that an ad is deceptive or unfair,it can

A) require the advertiser to run pro bono advertising for competitors.
B) convince the advertiser to sign a consent decree.
C) require the advertiser to reimburse consumers who bought the product.
D) force the firm that ran the deceptive ad to get "advance clearance" on all future ad campaigns.
E) place a federal representative in the deceptive firm's advertising department to oversee future ad campaigns.

Question 69

The National Advertising Division (NAD)of the Advertising Self-Regulatory Council (ASRC)

A) promotes the benefits of advertising to the Better Business Bureau and other major critics.
B) serves as the appeal board for decisions made by the National Advertising Review Board.
C) monitors advertising practices and reviews complaints about advertising from consumers.
D) sets up and maintains an all-consumer review board to evaluate all advertising.
E) guides new businesses in the development of ethical advertising codes.

Question 70

Two companies,Le Shuttle and P&O European Ferries,provide Europeans with the ability to cross the English Channel.An advertisement for Le Shuttle claimed it was more popular with travelers than P&O European Ferries.P&O European Ferries lodged an objection with a European regulatory agency and pointed out that it had carried 1.4 million cars in the previous year compared to Le Shuttle's 1 million.P&O European Ferries most likely wanted Le Shuttle to run _____ advertising.

A) corrective
B) professional
C) comparative
D) reparative
E) pro bono

Question 71

The primary purpose of the Advertising Self-Regulatory Council is to

A) promote and enforce standards of truth, accuracy, taste, morality, and social responsibility in advertising.
B) supplant the Federal Trade Commission as the chief advertising regulatory agency.
C) work with the Department of Justice to prevent any one company from monopolizing a particular medium.
D) set up and maintain a consumer review board to approve all advertising.
E) promote the benefits of advertising to its critics.

Question 72

Distinguish between primary demand and selective demand by giving an example of each.

Question 73

Which of the following is the largest of the U.S.business-monitoring organizations?

A) the Office of Consumer Affairs
B) the Better Business Bureau
C) the Consumer Protection Agency
D) the American Association of Consumers
E) the U.S. Chamber of Commerce

Question 74

Which of the following statements about the Food and Drug Administration (FDA)is true?

A) The FDA has authority over the labeling of cosmetics, drugs, and vitamin supplements.
B) The FDA monitors all copyrighted material published in the United States and abroad.
C) The FDA does not require health food manufacturers to list product ingredients on labels.
D) The FDA has no control over promotional statements that are included on package labels.
E) The FDA is a branch of the Federal Trade Commission (FTC) and under its jurisdiction.

Question 75

Adolph Coors Co.ran an ad that featured a purported taste test between Coors's Aspen Edge and Anheuser-Busch's Michelob Ultra.A taste tester downed a glass of Aspen Edge and took only a sip of Michelob Ultra.A print version of the ad said,"Beer drinkers agree that Aspen Edge has more taste than Michelob Ultra." Coors was forced to remove the television advertisements after Anheuser-Busch said it made unsubstantiated claims about consumer preferences.Anheuser-Busch most likely

A) asserted that Coors used bait-and-switch offers with consumers.
B) accused Coors of violating copyright and trademark laws.
C) relied on laws designed to protect against gray marketing.
D) wanted research data that supported Coors's claim.
E) issued an unsupported cease-and-desist order.

Question 76

Which federal agency would have the authority to deal with the fact that a brand of hotdog marked "low fat" contains only 10 percent less fat than regular hotdogs?

A) the Library of Congress
B) the Patent and Trademark Office
C) the Food and Drug Administration
D) the Office of Consumer Affairs Service
E) the Federal Communications Commission

Question 77

Good Housekeeping magazine places its "Seal of Approval" on all the products advertised in it.If any of the products are later found to be defective,Good Housekeeping promises to refund the money paid for the products.This kind of careful screening

A) is required by the Federal Trade Commission.
B) is a way for a medium to monitor its advertisements.
C) was required by legislation passed during the Great Depression.
D) is used by most print media, including the tabloids.
E) is redundant given the watchfulness of federal regulatory agencies.

Question 78

A trademark

A) is any word, name, or symbol that identifies one particular product or line of products from a single source.
B) protects the original work of authors and artists from being sold or plagiarized without their consent.
C) is required by law to be significantly different from the logo of an organization.
D) is registered and protected by the Library of Congress.
E) grants exclusive rights to sell a product for 50 years.

Question 79

An advertiser accused of deceptive or unfair advertising may sign a(n)_____,which is a document that states that the advertiser agrees to stop the objectionable advertising,but does not admit to any wrongdoing.

A) consent decree
B) product substantiation claim
C) cessation order
D) ad sanctioning agreement
E) guilt disclosure

Question 80

Latisha just wrote her first novel,a steampunk science fantasy for young adults.Which of the following protects Latisha's work?

A) patent
B) trademark
C) copyright
D) cease-and-desist order
E) title registration